With Perot investment, Connoisseur looks to grow

Updated 6:11 pm, Thursday, July 16, 2015

Jeffrey Warshaw, right, reached a deal with Perot Cos. to back a management-led buyout of Connoisseur Media, the Westport, Conn. company Warshaw created that owns radio stations in a dozen markets including its home turf of Fairfield County. less

Jeffrey Warshaw, right, reached a deal with Perot Cos. to back a management-led buyout of Connoisseur Media, the Westport, Conn. company Warshaw created that owns radio stations in a dozen markets including its ... more

Connoisseur Media radio stations 95.9 WFOX and STAR 99.9 WEZN are sponsors of live concerts throughout Fairfield County, including the Alive@Five summer concert series in Stamford, where Jeff Tuohy performed on July 9. less

Connoisseur Media radio stations 95.9 WFOX and STAR 99.9 WEZN are sponsors of live concerts throughout Fairfield County, including the Alive@Five summer concert series in Stamford, where Jeff Tuohy performed on ... more

The family investment office of former presidential candidate Ross Perot is backing a management-led buyout of Connoisseur Media, an operator of 42 radio stations nationally, including 99.1 WPLR, Star 99.9 WEZN and 95.9 WFOX covering Fairfield County.

Connoisseur Media did not disclose financial terms of its deal with Petrus Holding, which is run by Ross Perot Jr., son of the Texas billionaire. Petrus is based in Plano, Texas and is run as a subsidiary of Perot Cos., created as a family office to manage the fortune accumulated by the senior Perot from EDS, Perot Systems and other companies.

Based in Westport and with its primary local studio in Milford, Connoisseur Media was founded in 2004 by CEO Jeffrey Warshaw with backing from San Francisco-based Farallon Capital, four years after Warshaw sold the 39-station Connoisseur Communications to Cumulus Media (Nasdaq: CMLS) for $258 million.

Connoisseur Media is one of two large radio companies based in Fairfield County alongside the larger Townsquare Media based in Greenwich. Both companies are represented on a radio board of the National Association of Broadcasters, with Warshaw appointed in May to the board that already included Erik Hellum, executive vice president of Townsquare Media.

In July 2014, Townsquare (NYSE: TSQ) held an initial public offering of stock, which closed at $13.82 Thursday afternoon and is up up nearly 5 percent on the year.

Warshaw said he did not consider an IPO for Connoisseur Media, with Petrus Holding offering the advantage of a stable backer bringing the long-term outlook of a family office investor.

“For our interests, there’s no way we would want to be public versus having long-term, private financing,” Warshaw said. “We have flexibility we can’t get with the quarter-to-quarter (reporting) requirements of public companies.”

In 2013, Balance Point Capital Partners invested $11.1 million in support of Connoisseur Media’s acquisition of radio stations, with the Westport-based private equity investor having multiple radio and digital entertainment companies in its own portfolio. Connoisseur Media separately has debt-based financing from Ares Capital and GE Capital, valued at $134 million as of December 2014.

Warshaw said that the Petrus Holding infusion will be used to invest in its local staffs and programming, while allowing it to consider adding new markets via acquisitions.

Connoisseur acquired WPLR, WFOX and WEZN in 2013, with the FM stations sponsoring public concerts like the Alive@Five summer series in Stamford, as well as live sets in more intimate settings like acoustic sessions in local pubs that Star 99.9 broadcasts for its audience.

With the Petrus funding in hand, Warshaw gave no indication of any acquisitions on the immediate horizon. Connoisseur Media employs about 500 people today, with its other Northeast markets including Hartford and Long Island, N.Y.

In a May conference call, Townsquare Media CEO Alex Berkett said his own company continues to be active in assessing potential acquisitions in the radio, digital and events space, with Townsquare Media reporting a $130,000 profit in the first quarter as revenue rose 2 percent from a year ago to $81.1 million.

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“Right now there is nothing particularly imminent,” Berkett said at the time. “Our strategy focuses on finding the right type of assets which means ... strong market position and the right type of markets, which means small (or) mid-size markets at the right price. And right now we don’t see anything that meets all three of those targets.”